EQS-Adhoc: Marley Spoon Group SE to acquire BistroMD and to enter into a strategic partnership with FreshRealm

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Luxembourg, 30 January 2024. Today, Marley Spoon Group SE ("MSG") has signed a sale and purchase agreement for the acquisition of BistroMD, LLC (“BistroMD”) as well as - through its US subsidiary - an asset sale agreement with FreshRealm Inc. (“FreshRealm”).

BistroMD is a leading doctor-designed ready-to-eat meal plan based in Florida, United States. BistroMD generated ~€35m net revenue in 2023. BistroMD shareholders will receive 1.4m in Class A shares of MSG, 225,000 warrants for Class A shares exercisable at €15.00, and 225,000 warrants for Class A shares exercisable at €20.00 upon closing. BistroMD shareholders will receive up to an additional 1.2m in Class A shares 12 months after closing, subject to customary earn-out provisions. BistroMD carries approximately €11m in debt, of which €1.8m will be repaid upon closing. The transaction is subject to customary closing conditions, including financing, and is expected to close in February 2024.

MSG, through its US subsidiary, will further enter into a 7-year strategic partnership with FreshRealm, the innovative fresh meals solutions platform based in Ventura, California  upon closing of the asset sale agreement. FreshRealm is a channel-agnostic fresh meals platform that enables partners to operate asset-light and diversify their fresh meals offerings while enjoying the benefits of scale. As part of this partnership, FreshRealm will acquire MSG’s US operations assets for €22m and become its exclusive manufacturing and fulfillment partner for all United States-based activities.

This partnership is expected to create a platform for future market consolidation starting with the integration of BistroMD, whereby FreshRealm will manage all back-end operations, driving innovation while generating synergies for its partners in fixed and variable costs. Marley Spoon group will continue to operate its front-end operations, leveraging its global brand and marketing, customer service, consumer technology, and data platforms. The transaction is expected to reduce G&A, yield working capital benefits, and reduce variable costs over time.

Runway Growth Finance Corp. (“Runway”), a finance company focused on providing flexible capital solutions based in the United States, MSG’s senior lender, supports the above-mentioned transactions and has agreed in principle to certain amendments to Marley Spoon group’s existing debt facilities, namely an extension of 12 months of the interest-only period and the loan maturity date to January 2026 and June 2027, respectively. Marley Spoon group will repay Runway €10.3m toward its outstanding loan balance upon closing of the FreshRealm transaction.

In addition, certain larger investors have agreed to invest €8.035m in MSG, through the acquisition of 2,008,750 treasury shares at €4.00 per share to investors from MSG subject to the closing of the above-mentioned transactions.

These transactions will impact the Company’s cash and debt position upon closing as follows:

• Cash proceeds totaling €30m from (i) the €22m asset sale to FreshRealm of Marley Spoon’s US operations and (ii) the equity capital raise of €8m;
• A pre-payment, without penalty, of a portion of Marley Spoon’s outstanding loan balance with Runway in the amount of €10.3m. This comes on top of the nearly €8m in July 2023 that Marley Spoon re-paid in connection with the business combination agreement and that had resulted in a reduction of 1 percentage point in the cash interest rate on the outstanding loan balance, from 8.5% over three-month SOFR to 7.5%;
• A pre-payment, without penalty, of €3.7m towards BistroMD’s outstanding loan balance of €13.5, comprising long term debt and a revolver facility.